Gold’s spectacular rally has given way to a sharp correction, leaving investors at a crucial crossroads as Samvat 2083 begins. Domestic gold prices have fallen nearly 21% from their record high of ₹1,80,779 per 10 grams to around ₹1,42,364, wiping out a significant portion of the gains that had fuelled the precious metal’s record-breaking run. The latest selloff has been driven by weaker spot demand, with gold futures on the MCX declining 1.51% on Friday, 6 November, to ₹1,41,917 per 10 grams.
Yet, the correction comes against a backdrop of strong long-term returns and a historically favourable pre-Diwali trend. Motilal Oswal’s analysis highlights how domestic gold prices have climbed from around ₹30,000 in 2016 to nearly ₹1.50 lakh in 2026. With prices cooling after an extraordinary rally, the key question for investors is whether the decline offers an attractive entry point or signals further downside. Should investors buy the dip, stagger their purchases or wait for greater clarity?
The chart highlights a sharp correction in both gold and silver prices on the MCX in recent months after a strong rally earlier in 2026. MCX gold, which climbed to around ₹1.65 lakh per 10 grams in March, has since retreated to nearly ₹1.40 lakh. Silver has witnessed an even sharper decline, falling from its peak of around ₹4 lakh per kg in February to nearly ₹1.70 lakh. The trend indicates that precious metals have given up a significant portion of their earlier gains, with silver witnessing greater volatility than gold.
According to a Motilal Oswal report, the upcoming US midterm elections could add another layer of volatility to gold prices, alongside developments in monetary policy, inflation and geopolitics. The brokerage said market reactions to the elections could influence fiscal expectations, the US dollar and Treasury yields. However, the key trigger for gold may not be the peak in nominal yields, but a point at which real yields stop rising.
The brokerage noted that if real yields ease amid elevated inflation expectations, rising political and fiscal uncertainty, or signs that monetary tightening is hurting economic growth, the same bond market stress currently weighing on gold could eventually support its next leg of gains. A divided US Congress could add to policy uncertainty, while continued Republican control may keep concerns over fiscal deficits and Treasury supply elevated. Ultimately, the direction of real yields, rather than the election outcome itself, is likely to remain the more important indicator for gold.
From record high to a ~30% correction in nine months
According to Kedia Advisory, international gold prices have corrected 29.7% from their January 2026 peak of $5,598 per ounce to $3,937 currently. MCX gold prices have declined 22.9% from their peak of ₹1,80,779 to ₹1,39,433 per 10 grams, while the Dubai Real Estate Index has fallen 31.1%.
However, the brokerage highlighted that central banks continue to provide support to gold, with purchases reaching 321 tonnes in Q3 2026, up 42% year-on-year. Despite the sharp correction and the rupee’s weakness near 94.73 against the US dollar, Kedia Advisory remains cautiously bullish on gold for November–December 2026, noting that central banks, among the most influential buyers, are continuing to accumulate the metal.
Why did a ‘safe haven’ fall during a war?
Market experts point out that gold’s traditional safe-haven appeal has been challenged by an unusual combination of geopolitical and macroeconomic factors. While the Iran conflict and crude oil prices above $100 per barrel have fuelled inflation concerns, fears of higher inflation have also strengthened expectations of tighter monetary policy by the US Federal Reserve.
This has pushed up interest rate expectations and weighed on gold, triggering a selloff despite heightened geopolitical tensions. Experts believe the outlook for November–December will depend on whether crude oil prices cool and the Fed signals an end to its tightening cycle. If these pressures ease, the same chain of events could reverse, potentially providing fresh support to gold prices.
Technical Outlook
According to Kedia Advisory’s report dated 4 November, MCX gold is holding near the 38.2% Fibonacci retracement level of ₹1,37,500, indicating that the technical structure remains intact despite the recent correction. The brokerage has identified support at ₹1,37,468– ₹1,36,600, with deeper support at ₹1,35,000 and ₹1,24,090.
On the upside, the immediate resistance is placed at ₹1,46,232, followed by ₹1,48,582– ₹1,54,022. Kedia Advisory expects gold to trade in a broad range of ₹1,35,000– ₹1,48,600 over the next three months. Its six-month outlook points to a potential move above ₹1,54,000 if international gold prices cross $4,240 per ounce and the rupee remains weak.
Motilal Oswal maintains a ‘Buy on Dips’ stance, identifying an accumulation zone of $3,800–$3,900 per ounce for international gold. It has set a short-term target of $4,200 and a medium-term target range of $4,500–$4,700 per ounce.
Assuming a USD/INR exchange rate of 96, the brokerage considers ₹1,35,000 a favourable accumulation zone for domestic gold, with a short-term target of ₹1,48,000 and a medium-term target range of ₹1,60,000– ₹1,68,000.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
